alaskahydro

Alaska's energy agency said a proposed 660 MW hydroelectric dam could cost $4.5 billion, take four and a half years to build and could be operating by 2022.

Finance and design details remain uncertain, but estimates suggest Susitna dam could let utilities buy power for a little more than 6 cents a kilowatt-hour. The dam is seen as perhaps the only way to meet the state legislature’s 2010 goal of shifting half of Alaska’s electric power to renewables by 2025.

The state energy agency derived its estimates using assumptions that construction costs would be split between state capital investment and a 30-year financing plan carrying a 6 percent borrowing rate. Managers in 2010 reportedly discussed borrowing for the entire capital cost, but sources told local reporters that investors will likely want to see a down payment from utilities or the state before they’ll buy bonds.

The energy authority has said utilities and the state will eventually need to improve transmission lines and the dam likely will influence that need. The proposed project was planned in the 1980s but shelved when oil- and gas-fired electric generation remained relatively low cost.

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